Two MHC REITs have Good Yields

Two of three residential real estate investment trusts (REITs) recommended as having a good yield by Marc Gerstein at seekingalpha are MHC owners. Noting the tight lending standards for potential homebuyers, the accompanying unpredictable job market, and the rise in the rental market, Gerstein says UMH Properties appeals to people of modest means who may become buyers. In the meantime, rental income is good for cash flow while waiting for the housing market to improve. As such, at 6.4% UMH is the highest yielding residential REIT, but because it depends upon the Dividend Reinvestment Program (DRIP) as a source of externally raised capital, “it’s the riskiest selection in the context of a generally lower-risk group.” MNHProNews has learned the other REIT is Sun Communities, which Gerstein says has a lower yield at 5.5%, but operates on a broader and more national scale in terms of the manufactured homes it offers, and presents less of a risk. He says Sun’s home sales, same-site occupancy and revenues are all up in the first two quarters of this year, and the company is expanding its portfolio.

(Photo credit: UMH Properties)

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